Comments on: Yen’s Strength [has been] profoundly negative for global markets http://advisoranalyst.com/glablog/2008/03/27/yens-strength-has-been-profoundly-negative-for-global-markets/ Insight on investing and markets to get you going. Thu, 18 Mar 2010 11:00:53 +0000 http://wordpress.org/?v=2.7.1 hourly 1 By: GreenLight Advisor http://advisoranalyst.com/glablog/2008/03/27/yens-strength-has-been-profoundly-negative-for-global-markets/comment-page-1/#comment-1088 GreenLight Advisor Mon, 30 Jun 2008 20:13:50 +0000 http://greenlightadvisor.com/glablog/2008/03/27/yens-strength-has-been-profoundly-negative-for-global-markets/#comment-1088 Richard, it does appear that is what is happening. Central bank intervention in the dollar is no longer having the desired effect, now that the Fed has stood down on a rate hike for the time being. Shorting gold futures might prove to be a terrible strategy for lending support to the ailing dollar, given the new round of uncertainty kicked off by the downgrading of yet more monoline credit ratings. Richard, it does appear that is what is happening.

Central bank intervention in the dollar is no longer having the desired effect, now that the Fed has stood down on a rate hike for the time being.

Shorting gold futures might prove to be a terrible strategy for lending support to the ailing dollar, given the new round of uncertainty kicked off by the downgrading of yet more monoline credit ratings.

]]> By: Richard http://advisoranalyst.com/glablog/2008/03/27/yens-strength-has-been-profoundly-negative-for-global-markets/comment-page-1/#comment-1087 Richard Mon, 30 Jun 2008 16:42:31 +0000 http://greenlightadvisor.com/glablog/2008/03/27/yens-strength-has-been-profoundly-negative-for-global-markets/#comment-1087 The daily chart of EUR/JPY, FXE:FXY, the barometer of the yen carry trade, shows that the yen carry trade is unwinding. The weekly chart of FXE:FXY shows that the yen carry trade has topped out. Crown Forex writes "As for the Yen being the star in the forex market, risk aversion and investors risk appetite was able to help the yen gain against majors in the markets as investors were unwinding their carry trades taking the USD/JPY pair down to the 106.20s as the dollar continues to lose ground. Against the Euro, the yen gained from a record low at 169.45 to continue dragging the pair down to the current support level at 167.12 while the GBP/JPY is currently at 211.10s". Risk aversion has come to the traditionally yen-carry-trade favored BRICs: there is significant disinvestment from Brazil, EWZ, Russia, RSX, India, INP, and China, FXI. And risk aversion will rise significantly as corporate profits turn down; investors who sell stocks will be looking to the financial safehaven of gold. And a higher yen means a lower US dollar; in as much as gold trades inversely of the dollar; gold will be going up. The daily chart of EUR/JPY, FXE:FXY, the barometer of the yen carry trade, shows that the yen carry trade is unwinding. The weekly chart of FXE:FXY shows that the yen carry trade has topped out.

Crown Forex writes “As for the Yen being the star in the forex market, risk aversion and investors risk appetite was able to help the yen gain against majors in the markets as investors were unwinding their carry trades taking the USD/JPY pair down to the 106.20s as the dollar continues to lose ground. Against the Euro, the yen gained from a record low at 169.45 to continue dragging the pair down to the current support level at 167.12 while the GBP/JPY is currently at 211.10s”.

Risk aversion has come to the traditionally yen-carry-trade favored BRICs: there is significant disinvestment from Brazil, EWZ, Russia, RSX, India, INP, and China, FXI.

And risk aversion will rise significantly as corporate profits turn down; investors who sell stocks will be looking to the financial safehaven of gold.

And a higher yen means a lower US dollar; in as much as gold trades inversely of the dollar; gold will be going up.

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